May 2, 2023
Moodyâ€™s upgrades Tesla Inc to investment grade
Moodyâ€™s Upgrades Tesla Inc to Investment Grade
Tesla Inc, the American electric vehicle and clean energy company, has been upgraded to investment grade by Moodyâ€™s Investors Service. This is a significant milestone for the company, as it means that Teslaâ€™s debt is now considered to be of a higher quality and less risky for investors.
Moodyâ€™s upgraded Teslaâ€™s corporate family rating to Ba1 from Ba2, and its senior unsecured rating to Baa3 from Ba3. The ratings agency cited Teslaâ€™s strong financial performance, including its profitability and cash flow generation, as well as its leading position in the electric vehicle market, as reasons for the upgrade.
Teslaâ€™s profitability has been a key factor in its recent success. The company reported a net income of $1.1 billion in the second quarter of 2021, its fifth consecutive quarter of profitability. This has been driven by strong demand for its electric vehicles, as well as its energy storage products.
Teslaâ€™s position in the electric vehicle market is also a major factor in its success. The company has been a pioneer in the industry, and its vehicles are widely regarded as some of the best on the market. Teslaâ€™s Model S was the first electric vehicle to win the Motor Trend Car of the Year award, and the Model 3 has been the best-selling electric vehicle in the world for the past few years.
Moodyâ€™s also noted that Teslaâ€™s strong liquidity position, with over $16 billion in cash and cash equivalents on its balance sheet, provides a cushion against potential risks. This includes the ongoing global semiconductor shortage, which has impacted the automotive industry as a whole.
The upgrade to investment grade is a significant achievement for Tesla, as it will make it easier and cheaper for the company to borrow money in the future. This will allow Tesla to continue to invest in its business, including expanding its production capacity and developing new products.
Overall, Moodyâ€™s upgrade of Tesla to investment grade is a testament to the companyâ€™s strong financial performance and leading position in the electric vehicle market. It is a major milestone for the company, and one that will help to secure its future success.